Climate Change and Planning to Respond to Demand for Energy Services FortisBC Electric Resource Planning Advisory Group Paul Wieringa Electricity and Alternative Energy Division B C Ministry of Energy and Mines July 28, 2015

NERC Regions

Utilities: Paying Attention to Demand For the past 10 years: Supply: Increasingly, environmental concerns pushing clean/renewable resources Demand: Energy efficiency Future: Demand: Increasingly, environmental concerns pulling electrification; productivity Technology Supply: continued focus on clean/renewable resources

Plans 2002: BC Energy Plan: Incremental Supply from IPPs for BC Hydro, strengthen BCUC, energy efficiency 2007: BC Energy Plan: energy efficiency 50% of incremental supply for BC Hydro, 93% clean resources province-wide 2008: Climate Action Plan: revenue neutral carbon tax, GHG targets, renewable and low carbon fuels

2010 Clean Energy Act GHG reduction targets S.18 Prescribed undertakings Energy efficiency 67% of incremental supply 93% clean or renewable resources Exempted projects and procurements from BCUC approval, expanded scope for BCUC on environmental and social issues. Export market growth potential: surplus and insurance Builds on revenue neutral Carbon Tax: $10/MT---$30/MT Policy shift: greater focus on environment, reducing CO2 emissions, energy efficiency while maintaining an export oriented focus. Policy: private sector and First Nations to build electricity generation; set clear targets; provide clear pricing signals on CO2.

Importance of Energy Efficiency

1. Accelerating Energy Efficiency Utilities Commission Act - DSM Regulation Expand utility investment in DSM programs Incentives, education, and technical support Low income programs Portfolio approach Developing Codes and Standards LiveSmart BC: Efficiency Incentive Program Incentives and support for residential energy efficiency upgrades LiveSmart BC: Small Business Program Advice and support for small businesses to save energy On-bill utility financing Utility-based loan program tied to the meter Can transfer to new owner or tenant when occupancy changes

DSM Regulation Address greenhouse gas emissions Value emissions in cost-effectiveness tests Places natural gas energy savings on more equal footing with clean electricity supply as an emission-reduction strategy BCUC must compare electricity DSM against cost of clean long-term BC electricity supply—zero emission clean energy alternative (ZEEA) Not export or spot market

2. Focus on Customers’ Bills 10 Year Rates Plan for BC Hydro Keep rates predictable $2.4 billion/year investments in aging and new infrastructure Government Approved BC Hydro IRP Focus on conservation first, managing IPP resources, continued development of Site C and support for LNG Burrard Thermal shutdown Clean Energy Strategy to promote smaller clean energy opportunities and First Nations participation

Site C Third Dam on Peace River 1,100 MW of capacity; 5,100 GWh/yr of energy Lowest Cost  Keeps rates low Provides Capacity Flexibility Lowest GHG emissions

3. Areas of Demand Growth LNG; 8 new mines and 9 upgrades or expansions targeted under BC Jobs Plan Electrifying the upstream oil and gas sector Transmission expansions Electrification (vehicles, heat pumps, etc.) There are many unknowns about demand in BC. For FortisBC Electric, I will use the example of electric vehicles to illustrate a desired market transformation to lower emissions and lower the cost of transportation. (Electrifying the oil and gas sector is less applicable to FortisBC Electric and therefore I will focus on other areas and use transportation as an example.)

Transportation Fuel Volumes Fuel Reported Units (millions) Quantity 2010 2011 2012** Gasoline litres 4,459 4,311 4,089 Ethanol 235 263 252 Diesel 2,977 3,411 3,389 Biodiesel 61 96 89 HDRD 31 59 69 LNG Kg 0.16 2.4 Electricity KWh 167 169 178 Hydrogen 0.18 0.26 0.28 CNG m3 4.35 4.82 0.64 Propane * 133 0.65 * Propane was under-reported in 2010. ** The 2012 quantities are 2/3 of 2012/13 quantities for Part 3

Clean Energy Vehicle (CEV) Program $10.6 million over the next three years from Innovative Clean Energy (ICE) fund $7.5 million for point-of-sale incentives, and dealer and sales staff incentives for electric and hydrogen fuel cell vehicles; $1.59 million for investments in charging infrastructure and hydrogen fuelling infrastructure; $1 million to assist fleets in adopting CEVs ; and $500,000 for research, training, technology development and public outreach to help grow a local clean transportation technology sector The Clean Energy Vehicle (CEV) Program has been reintroduced as of April 1, 2015. $10.6 million over the next three years from Innovative Clean Energy (ice) Fund $7.5 million for point-of-sale incentives, and dealer and sales staff incentives for electric and hydrogen fuel cell vehicles; $1.59 million for investments in charging infrastructure and hydrogen fuelling infrastructure; $1 million to assist fleets in adopting CEVs ; and $500,000 for research, training, technology development and public outreach to help grow a local clean transportation technology sector

Clean Energy Vehicle (CEV) Program Eligible vehicles and the maximum point-of-sale incentive amounts : Battery Electric Vehicle: $5,000 Hydrogen Fuel Cell Vehicle: $5,000 plus $1,000 fuelling incentive Plug-In Hybrid Electric Vehicle /Extended Range Electric Vehicle with a minimum battery capacity greater than 15 kilowatt hours (kWh): $5,000 Plug-In Hybrid Electric Vehicle/Extended Range Electric Vehicle with a minimum batter capacity less than 15kWh but greater than 4kWh: $2,500 Eligible vehicle list and information at www.cevforbc.ca Vehicle rebate information: Battery Electric Vehicle: $5,000 Hydrogen Fuel Cell Vehicle: $5,000 plus $1,000 fuelling incentive Plug-In Hybrid Electric Vehicle /Extended Range Electric Vehicle with a minimum battery capacity greater than 15 kilowatt hours (kWh): $5,000 Plug-In Hybrid Electric Vehicle/Extended Range Electric Vehicle with a minimum batter capacity less than 15kWh but greater than 4kWh: $2,500

CEV: Outcomes in BC More than 2000 EVs on the road 692 public Level 2 charging stations 30 DC fast charging stations (17 installed) 306 residential Level 2 charging stations Student training, research and development in electric vehicles and charging infrastructure The development of guides and tools for planning and installing infrastructure in public spaces and in strata- owned buildings Public outreach strategy and campaign (Emotive) List of outcomes in BC (self explanatory) Student training, research and development bullet refers to the: Academic & Capacity Building Fund from the previous CEV Program which included: Station planning Buyer behaviours Policy analysis Grid impacts Niche projects

Climate Leadership Plan Live Reduce consumption; energy efficiency Fuel switching, district energy, net zero buildings Community design Travel Efficient movement of people and goods VKT Transit Clean transportation fuels Work Competitiveness R&D, Technology Efficiency Value Pricing Adaptation Energy efficiency/Productivity/Competitiveness linkages Industrial energy reporting/ISO50001 • Pay-As-You-Save energy efficiency financing • Efficiency supported by Smart Grid – electric vehicles, demand management

CLP Process Survey and submissions until August 17, 2015. Draft Plan for comment December 2015 Final Plan March 2016.

Integrated Resource Planning An integrated resource plan is a utility plan for meeting forecasted annual peak and energy demand, plus some established reserve margin, through a combination of supply-side and demand-side resources over a specified future period. (Regulatory Assistant Project/Synapse, 2013) Increasingly, more difficult to understand demand and demand-side resources, than supply-side resources. Climate change mitigation measures change end-use consumption.

Final Thoughts Demand for Electricity Services Energy efficiency reduces demand Electrification increases demand Transportation Space and Water Heating New electrification metrics Technology Market Transformation Incentives Role of utilities End use focus, downstream of the meter